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Oil Falls to Near Six-Month Low as Weak China Data Fuels Demand Concerns

Synopsis:

Oil prices slumped to a near six-month low as weak economic data from China intensified demand worries. Brent crude hovered near $70 a barrel, while WTI fell below $67. Declining Chinese consumer inflation, OPEC+ production plans, and global trade concerns pressured oil markets further.


Oil prices tumbled to their lowest levels since September, reflecting growing concerns over global demand. Brent crude traded close to $70 per barrel, while West Texas Intermediate (WTI) slipped below $67 after seven consecutive weeks of declines. The latest downturn follows weak economic data from China, where consumer inflation dropped more than expected, turning negative for the first time in over a year. The deflationary trend in the world’s largest crude importer has raised fears of slower industrial activity and reduced oil demand.

Also read: Tata Power Renewable to Invest ₹49,000 Crore in Andhra Pradesh Green Energy

OIL INDIA LTD

Trade

410.756.29 (1.55 %)

Updated - 30 April 2025
414.00day high
DAY HIGH
397.80day low
DAY LOW
3621149
VOLUME (BSE)

Key Takeaways

  • Brent crude hovers near $70 per barrel, WTI slips below $67.

  • China’s consumer inflation falls below zero for the first time in 13 months.

  • Speculators reduce bullish bets on Brent crude, marking the sharpest decline since July.

  • OPEC+ unexpectedly agrees to increase oil supply from April.

  • Saudi Arabia lowers oil prices for Asian buyers for the first time in three months.

Also read: RailTel Bags ₹28.29 Crore Order from Northern Railway for Signalling Work

Weak Chinese Demand and Global Economic Uncertainty Weigh on Oil

China’s economic slowdown has been a key driver of the recent oil price slump. The country’s lower-than-expected consumer inflation signals ongoing deflationary pressures, which could curb industrial growth and energy consumption. The weak demand outlook has led traders to scale back bullish positions on Brent crude, resulting in a significant drop in speculative bets—the largest since July.

Further compounding bearish sentiment, OPEC+ announced last week that it would increase oil production from April, despite prior delays due to market uncertainty. This decision has added to fears of oversupply, particularly as global demand remains weak amid economic headwinds.

Meanwhile, the United States is grappling with trade uncertainties. President Joe Biden dismissed concerns about the economy’s trajectory, calling it a “period of transition” rather than a recession. However, Federal Reserve Chair Jerome Powell acknowledged rising economic uncertainty but emphasised that there was no immediate need to adjust interest rates.

Oil Market Snapshot

Indicator

Value

Change

Brent Crude

$70.12 per barrel

-2.3%

WTI Crude

$66.45 per barrel

-2.8%

China CPI

-0.3% (YoY)

First negative in 13 months

OPEC+ Decision

Increase production from April

Market reaction negative

Saudi Arabia Lowers Oil Prices for Asian Buyers

In response to weakening global demand, Saudi Arabia reduced its crude oil prices for Asian buyers, marking the first price cut in three months. This move reflects the growing concern over the energy market’s stability, especially as China—the largest oil consumer in Asia—faces persistent economic challenges.

While oil prices may experience short-term volatility, market participants are closely watching China’s economic trajectory and the potential impact of increased OPEC+ supply on global inventories. If demand continues to weaken, further price adjustments could follow, adding more uncertainty to the already fragile oil market.

The decline in oil prices to a near six-month low underscores mounting global economic challenges. Weak Chinese economic data, OPEC+ production increases, and geopolitical uncertainties have combined to dampen market sentiment. With speculators cutting bullish positions and major oil producers adjusting pricing strategies, the outlook remains uncertain. Oil traders and investors will closely monitor upcoming economic reports and policy decisions to gauge the future trajectory of the global energy market.

Also read: China Imposes Retaliatory Tariffs on Canadian Farm and Food Products

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This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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